Now THAT’s a Principal-Agent Problem

The Swedish secret service has caused quite an uproar recently. Following a difficult year, the Chief of the agency decided to spend 5 million Swedish kroner on a James Bond themed (!) party to boost the morale among its 1,000 employees. That sum amounts to more than 750 USD per agent-slash-employee for one single party. The principals — the Swedish taxpayers — seem to think that this was way over the top, and evidence of imperfect interest alignment and agents acting in their self interest. Jokesters have also pointed out that if they had thrown a STASI or KGB-themed party instead, it would have been a tad less glamorous, but spending could have been more in line with the principals’ interests. I don’t know, but perhaps the Swedes will have to invest more in monitoring their monitors.

Sweden has a peculiar system when it comes to the government agencies’ relation to the government. The minster cannot decide over the agencies in separate matters, only in general. This has given an unclear role to the government ministries and the agencies. No one really knows who is responsible for what. I wrote an article around these issues in one of Sweden’s major newspapers this August. Strengthen ministerial rule or make agencies more independent to solve some or the ambiguities.

With any of these models implemented secret service parties more in line with the Soviet-style christmas party in the recent film Tinker Taylor Soldier Spy, directed by a Swede, might be the model for the future.